US Stocks Decline; Proctor & Gamble Gains

U.S. stocks declined after data showing a steeper-than-forecast decline in claims for jobless benefits and a large jump in the trade deficit.

Shortly after the opening bell, the Dow Jones Industrial Average was lower by about 35 points. The measure was weighed down by losses of about 1% each for American Express, Boeing and Bank of America.

Some of that pressure was offset by a 3.7% gain for Procter & Gamble, which said it will cut prices and increase promotions, which it expects to boost sales. P&G had shifted its emphasis to pricier products but has been squeezed as consumers shifted to cheaper rivals and store brands amid the recession.

Mixed economic reports kept stocks from moving too far. Initial jobless claims fell 26,000 to 550,000 in the week ended Sept. 5, the Labor Department said, a deeper slide than expected. The four-week average of new claims fell by 2,750 to 570,000 from the previous week's revised figure of 572,750.

Separately, the U.S. deficit in international trade of goods and services widened 16.3%, its largest percentage climb since February 1999, to $31.96 billion, the Commerce Department said. The recent rebound in oil prices has been pushing the trade deficit back up, following a decline earlier in the year, when demand for goods and services was down across the board.

International trade has been one of the few supports to the economy during the recession, contributing 1.6 percentage points to second-quarter gross domestic product to partially offset declines in consumption and investment. The report suggested that trade could be more of a drag in the third quarter.

Treasury prices rose, with the benchmark 10-year note gaining 16/32 to yield 3.419%. Yields move inversely to prices. Government bond prices were higher globally after central banks in New Zealand, South Korea, the U.K. and Canada kept interest rates unchanged at low levels.

Other major stock indexes were slightly lower. The S&P 500 was off about 0.4% as materials shares slipped but consumer-staples stocks rose. The Nasdaq Composite Index was down 0.2%.

Ahead of weekly U.S. oil inventories data, oil futures rose 38 cents to $71.69 a barrel as the International Energy Agency lifted energy-demand forecasts and OPEC held production quotas unchanged.

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